- Description
ACC 460 Wk 3 – Practice: Wk 1 Knowledge Check
Wiler City receives a trust donation for the purpose of maintaining flower beds in city parks, but the donor specifies that the principal must be maintained. This type of trust would be most appropriately accounted for in a:
Multiple Choice
Special Revenue Fund.
General Fund.
Permanent Fund.
Private Purpose Trust Fund.
On October 1, 2019, the City of Thomasville issued $5,000,000 in 4%, general obligation bonds at 101 for the purpose of constructing an addition to City Hall. The premium was transferred to a debt service fund. A total of $4,968,750 was used to construct the addition, which was completed prior to June 30, 2020. The remaining funds were transferred to the debt service fund. The bonds were dated October 1, 2019, and paid interest on April 1 and October 1. The first of 20 annual principal payments of $250,000 is due October 1, 2020. The fiscal year for Thomasville is July 1 – June 30.
What amount would be reported as debt service expenditures in the year ended June 30, 2020 and 2021?
Options 2020 2021
- $200,000. $450,000
- $200,000. $445,000
- $100,000. $450,000
- $100,000. $445,000
________________________________________
Multiple Choice
Option A.
Option B.
Option C.
Option D.
How would the government account for the unused bond proceeds upon completion of a capital project?
Multiple Choice
As an other financing source in the debt service fund and as an other financing use in the capital projects fund.
As an other financing source in the government-wide Statement of Activities.
As a revenue in the debt service fund and as an expenditure in the capital projects fund.
As an other financing source in the capital projects fund and as an other financing use in the debt service fund.
A governmental fund’s Statement of Revenues, Expenditures, and Changes in Fund Balances reported expenditures for capital outlay in the amount of $5,000,000. Capital assets for that government cost $110,000,000, including $20,000,000 in land. Depreciable assets are amortized over 20 years, on average. The reconciliation from the governmental funds changes in fund balances to the governmental activities change in Net Position would reflect a(an):
Multiple Choice
Increase of $500,000.
Decrease of $250,000.
Decrease of $500,000.
Increase of $250,000.
Assets of internal service funds most typically appear in which column of the government-wide Statement of Net Position?
Multiple Choice
Governmental Activities.
Business-like Activities.
Component Units.
None of the choices are correct.
Which of the following fund’s assets and liabilities would not be included in the government-wide financial statements.
Multiple Choice
Private Purpose Trust Fund.
Internal Service Fund.
Capital Project Fund.
Enterprise Fund.
Which of the following financial statements must special-purpose governments include in their financial statements if the special purpose government is engaged in both governmental and business-type activities or in more than one governmental activity?
Multiple Choice
Government-wide financial statements.
Fund basis financial statements.
Both of the choices are correct.
Neither of the choice is correct.
Which of the following financial statements must special-purpose governments include in their financial statements if the special purpose government is engaged in a single business-type activity?
Multiple Choice
Government-wide financial statements.
Fund basis financial statements.
Both of the choices are correct.
Neither of the choice is correct.
A government signed a five-year capital lease on January 1, 2020 to obtain some equipment for the fire department. The lease provided that the government would make a down payment of $20,000 and four $20,000 payments each year after that, beginning January 1, 2019. The government has a fiscal year ending December 31. Upon inception of the lease, the journal entry in the General Fund would:
Multiple Choice
Debit expenditures for the present value of the payments (including the $20,000 down payment), credit cash for $20,000, and credit other financing sources for the difference between the $20,000 and the present value of the future payments.
Debit expenditures for $20,000 and credit cash for $20,000.
Debit expenditures for $100,000, credit cash for $20,000, and credit accounts payable for $80,000.
Debit expenditures for the present value of the payments (including the $20,000 down payment), credit cash for $20,000, and credit accounts payable for the difference between the $20,000 and the present value of the future payments.
At the inception of a capital lease agreement for a piece of equipment used in governmental operations:
Multiple Choice
an Other Financing Source is recorded in the General fund.
a liability is incurred and reported in the government-wide financial statements.
an expenditure is recorded in the governmental fund.
All of the choices are correct.